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INDUSTRY UPDATES

22.06.2012

STEEL, METALS AND MINING

Indian importer riding high on
Boron added steel to avoid custom duty

Indian Express reported that leading domestic steel makers have alleged
that overseas steel producers, mainly from China, have effectively side stepped
paying the enhanced import duty of 7.5% by taking advantage of an anomaly in
the Customs Act and selling their produce in India as ‘alloy steel’.

In a meeting with steel secretary Mr DRS Chaudhary on May 30, the Indian steel
firms have said that in view of the increase in the import duty on non alloy
steel from 5% to 7.5% in the Finance Bill 2012-13, the Chinese steel exporters
have started bypassing the import duty classification by taking advantage of an
anomaly in the duty structure.

Under Chapter 72 of the Customs Act, addition of a minimum of 0.0008% boron to
steel changes the classification of this metal from ‘non alloy’ to ‘alloy
steel’, which is what the Chinese companies are resorting to. They are
effectively adding the minimal quantity of boron in their produce and shipping
them to India as ‘alloy steel’ and are thereby avoiding paying the increased
import duty.